Budget (North-East)

Iain Wright Excerpts

Tuesday 17th April 2012 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship again, Sir Roger. I congratulate my hon. Friend the Member for Gateshead (Ian Mearns) on securing this important debate.

We in the north-east have fantastic potential to lead the country out of recession into sustainable, long-term growth. In the Budget last month, however, the Chancellor failed to help the region fulfil its potential or address its challenges. I am critical of the Chancellor not only because of what was in the Budget, in which he showed the wrong policies, the wrong values and the wrong judgments, but even more because of what he left out. He failed to use the opportunity to grasp the enormous potential of our region and, perhaps most damning of all, simply neglected to remember the north-east at all. For example, there was nothing to mitigate the effect on energy-intensive industries or to incentivise businesses and to give firms in the region or elsewhere the confidence to invest their substantial cash piles in improving the productivity of our region.

On Friday, I met dynamic, energetic and ambitious entrepreneurs in the technical, digital and creative sectors in our region, running businesses such as Stick Theory, Love Your Larder and Sherpa. They have the potential to grow, to thrive and to create job opportunities. I asked them what was the one thing they wanted from the Government. They said improvements in transport infrastructure, making it easier to get on a train, to get to London, to make contacts and win businesses. In the Red Book announcement of £130 million for the northern hub rail scheme, however, no north-eastern town or city was even mentioned, let alone had any investment.

In the time available, I want to concentrate on the biggest neglect of the lot: unemployment, which is the biggest single social and economic factor affecting my constituency. The number of claimants in Hartlepool has risen month on month and year on year to reach 4,678 in February. The number of unemployed in Hartlepool is now higher than it was at the height of the global recession, and tomorrow’s publication of the March unemployment statistics will probably see a further rise. Contained in those figures, however, there is even bleaker news. Almost one in four young men, or 23.8% of 18 to 24-year-old young men, is claiming jobseeker’s allowance. When an area hits one in four young men out of work, it has reached crisis point. We last saw such statistics for youth unemployment back in the 1980s, when my shipyards and steel works closed down. For many lads coming to adulthood in that time, theirs was a lost generation who faced no pay or low pay, benefits and illness; they failed to fulfil their potential. My town, arguably, has not really recovered from the social and economic shock of the deindustrialisation of 30 years ago, yet we are in danger of experiencing that shock again because of the neglect of the Government.

The Minister must recognise the lessons of history and ensure that young people are helped into work and training. It is economically ignorant to suggest that public sector jobs are crowding out private sector employment and growth, and that the best approach is to cut drastically public sector employment. It is economically illiterate to believe that a region’s employment and growth prospects will somehow bloom if spending, resources and demand are withdrawn quickly, or will be helped if regional pay bargaining strips out regional income. The Chancellor had a perfect opportunity to do something in his Budget to encourage employment, especially for the young. Instead, he chose to provide tax cuts for millionaires. Despite the importance of youth unemployment, the Red Book contained only one, single, derisory new announcement—complete with spelling mistake—about such a huge social and economic issue. The announcement that the Government

“will pilot the best way to introduce a programme of enterprise loans to help young people”

is patronising, smacks of gimmick and gesture politics and will do nothing to stop a lost generation of young people. I ask the Minister to think again.